Mortgage rates are delivering a touch of holiday optimism this week, dropping to their lowest point of the year and signaling improved rate conditions heading into 2026 compared to the beginning of 2025.
The 30-year fixed-rate mortgage has averaged 6.15% this week, marking the lowest rate of 2025, according to Freddie Mac. Rates have remained relatively steady in recent weeks, hovering near 6.2% since late November.
This is a notable improvement from a year ago, when the 30-year average stood at 6.91% and later surged past 7% in mid-January. The current level is the lowest seen since early October 2024, based on Freddie Mac’s records. Meanwhile, the 15-year fixed-rate mortgage showed a similar downward trend, averaging 5.44% this week compared to 5.5% last week. These rates peaked at their yearly low of 5.41% in September and were matched again in October.
Mortgage News Daily, using separate metrics for rate tracking, observed relatively stable movements recently and listed the 30-year fixed rate at 6.2% as of December 31. With upcoming economic data releases, including a jobs report on January 9 and an inflation update on January 13, mortgage rates are expected to remain steady for now. Despite these reductions in mortgage rates, affordability challenges persist for many potential buyers. Lisa Sturtevant, chief economist at Bright MLS, believes it will take years of reduced rates, slower home price growth, and rising household incomes to deliver significant improvements in housing affordability. She emphasized that although decreasing rates can ease affordability issues, a large number of buyers are likely to remain priced out of the market in 2026.
Currently, the monthly payment for a median-priced home averages about $2,740. Nonetheless, there is cautious optimism for a more active spring season in homebuying compared to recent years. Joel Berner, senior economist at Realtor.com, noted that declining mortgage rates have already begun to energize pending home sales, boosting activity during what is typically a slow time of year.
Pending home sales in November rose by 2.6% compared to the same period last year, according to the National Association of Realtors. Signed contracts for these sales often translate into finalized purchases within a month or two, offering hope that this positive momentum could carry over into the months ahead.
